Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

"Fat Finger Error" the phrase (and excuse) du jour. Repeat until you no longer question it.

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU
 
underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:34 PM
Original message
"Fat Finger Error" the phrase (and excuse) du jour. Repeat until you no longer question it.
Fat Fingers Cause Panics
http://blogs.forbes.com/greatspeculations/2010/05/06/fa... /

The Overnight Report: Foolish ECB And A Fat Finger
http://au.ibtimes.com/articles/20100507/the-overnight-r...

CNBC: A Citigroup Trader Made The Big Fat Finger Error
http://www.businessinsider.com/cnbc-a-citigroup-trader-...


Sources Say Possible Trading Error at Citigroup to Blame
http://abcnews.go.com/Business/dow-jones-dives-european...

Printer Friendly | Permalink |  | Top
SemiCharmedQuark Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:35 PM
Response to Original message
1. Like I said in the other thread, as totally ridiculous as it sounds, this has happened before
Edited on Thu May-06-10 08:36 PM by SemiCharmedQuark
Japan in 2005.

I'm not sure what happened this time, but the idea isn't *totally* out there.

http://www.msnbc.msn.com/id/10394551
Printer Friendly | Permalink |  | Top
 
girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-07-10 05:47 AM
Response to Reply #1
24. No, it's pretty much totally out there.
Listen to this S&P pit trader in action during the crash

http://www.zerohedge.com/sites/default/files/Market%20C...

No way this was being caused by one fat finger trade. No way.
Printer Friendly | Permalink |  | Top
 
madinmaryland Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:38 PM
Response to Original message
2. I think the guy must have thought someone said it was worth a brazillion dollars!
Printer Friendly | Permalink |  | Top
 
underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:40 PM
Response to Reply #2
3. :-)
Printer Friendly | Permalink |  | Top
 
Sanity Claws Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:42 PM
Response to Original message
4. What do you think the real story is?
I'm not arguing with you. I'm just trying to figure out what other explanations there could possibly be
Printer Friendly | Permalink |  | Top
 
underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:44 PM
Response to Reply #4
7. No one oversees one guy entering an order?
if they don't then they aren't very smart. Mistakes happen (as posted above) but hey they are the ones with the fancy degrees and the "Talent" that has to be retain, right?
Printer Friendly | Permalink |  | Top
 
girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-07-10 06:15 AM
Response to Reply #4
28. Algorithmic Trading and Price Volatility..
Edited on Fri May-07-10 06:16 AM by girl gone mad
I do not agree with Rajiv that the decline may have been "triggered" by an erroneous trade, because that trade was not even entered until well after the sell-off was underway. Otherwise, his analysis is good.

Algorithmic Trading and Price Volatility
http://rajivsethi.blogspot.com/2010/05/algorithmic-trad...

Yesterday's dramatic decline and rapid recovery in stock prices may have been triggered by an erroneous trade, but could not have occurred on this scale if it were not for the increasingly widespread use of high frequency algorithmic trading.

Algorithmic trading can be based on a variety of different strategies but they all share one common feature: by using market data as an input, they seek to exploit failures of (weak form) market efficiency. Such strategies are necessarily technical and, for reasons discussed in an earlier post, are most effective when they are rare. But they have become increasingly common recently, and now account for three-fifths of total volume in US equities:

    Algorithms have become a common feature of trading, not only in shares but in derivatives such as options and futures. Essentially software programs, they decide when, how and where to trade certain financial instruments without the need for any human intervention... markets have come to be dominated by high-frequency traders who rely on the perfect marriage of technology and speed. They use algorithms to trade at ultra-fast speeds, seeking to profit from fleeting opportunities presented by minute price changes in markets. According to Tabb Group, a consultancy, algorithmic and high-frequency trading accounts for more than 60 per cent of activity in US equity markets.

This is a recipe for disaster:

    In a market dominated by technical analysis, changes in prices and other market data will be less reliable indicators of changes in information regarding underlying asset values. The possibility then arises of market instability, as individuals respond to price changes as if they were informative when in fact they arise from mutually amplifying responses to noise.

Under such conditions, algorithmic strategies can suffer heavy losses. They do so not because of "computer error" but because of the faithful execution of programs that are responding mechanically to market data. The decision by Nasdaq to "cancel trades of 286 securities that fell or rose more than 60 percent from their prices at 2:40 p.m." might therefore be a mistake: it protects such strategies from their own flaws and allows them to proliferate further. Canceling trades can be justified in response to genuine human or machine error, but not in response to the implementation of flawed algorithms.
Printer Friendly | Permalink |  | Top
 
Rex Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:42 PM
Response to Original message
5. It is so silly, everyone saw the impossible happen however improvable
it was and wants to blame something stupid. Like a human hand? Wait...invisible hand, course correction...holy hell it works!

Printer Friendly | Permalink |  | Top
 
underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:44 PM
Response to Reply #5
8. Ha!
the Fat Finger of the Invisible Hand
Printer Friendly | Permalink |  | Top
 
Rex Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:49 PM
Response to Reply #8
11. When all other truths prove wrong, the most improvable or obvious
must be the truth. And we saw it in our lifetimes! Mark this day. :crazy: Computers rulz us now!
Printer Friendly | Permalink |  | Top
 
Nikki Stone1 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:43 PM
Response to Original message
6. Sorry, I don't buy it.
Some entity trashed stock values and picked up bargain basement values.
Printer Friendly | Permalink |  | Top
 
underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:45 PM
Response to Reply #6
9. Someone made a boatload on this
http://www.democraticunderground.com/discuss/duboard.ph...

Accenture (ACN) opened at about $42, then traded down to one penny at one point. The stock ultimately closed at $41.09
Printer Friendly | Permalink |  | Top
 
Nikki Stone1 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:53 PM
Response to Reply #9
13. It sounds like a hit
Any other info on this?
Printer Friendly | Permalink |  | Top
 
underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:59 PM
Response to Reply #13
17. YES! we found out the talent at Citigroup with the "fat finger"
Printer Friendly | Permalink |  | Top
 
Nikki Stone1 Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-07-10 03:57 AM
Response to Reply #17
22. LOL!!!!!!!!!!!
:D
Printer Friendly | Permalink |  | Top
 
Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 09:01 PM
Response to Reply #9
19. However that boatload was spread out over thousands of buyers.
A single seller sold off billions worth of stock from $41 down to $0.00.

So while money changed hands the person making the drive down LOST a boatload.

Not really inspiring for some massive conspiracy.

A brokerage with way too much power and money fucked up, lost a tremendous amount of money, and almost tanked the market.
Printer Friendly | Permalink |  | Top
 
Yeahyeah Donating Member (741 posts) Send PM | Profile | Ignore Thu May-06-10 08:46 PM
Response to Original message
10. They always give us the fat finger.
Printer Friendly | Permalink |  | Top
 
pscot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:50 PM
Response to Original message
12. The Fickle Finger of Fate
There used to be an award for this sort of thing.
Printer Friendly | Permalink |  | Top
 
Sanity Claws Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:54 PM
Response to Reply #12
14. Laugh In
I'm old enough to remember that show
Printer Friendly | Permalink |  | Top
 
RKP5637 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:58 PM
Response to Reply #14
16. +1, n/t
Printer Friendly | Permalink |  | Top
 
tinymontgomery Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 08:56 PM
Response to Original message
15. Local faux news
local faux news is trying to connect the Greece problems with the run.
Printer Friendly | Permalink |  | Top
 
RKP5637 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 09:00 PM
Response to Reply #15
18. I'm surprised they haven't blamed Obama yet... n/t
Printer Friendly | Permalink |  | Top
 
gravity Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 09:03 PM
Response to Original message
20. It is the most plausible explanation
and the markets reacted exactly as they should in such a situation.
Printer Friendly | Permalink |  | Top
 
girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-07-10 05:38 AM
Response to Reply #20
23. Not only is it not plausible..
it's demonstrably false.

The market had already been in pure sell mode for 20 minutes, and was down 5%, by the time the typo trade was supposedly entered.

Yesterday's action appears to have been the predictable and predicted outcome of massive deleveraging and illiquidity wrought by profligate high frequency trading.
Printer Friendly | Permalink |  | Top
 
Initech Donating Member (1000+ posts) Send PM | Profile | Ignore Thu May-06-10 09:19 PM
Response to Original message
21. "The fingers you have used to dial this phone are too fat. To obtain a special dialing wand..."
"Please mash the keypad with your hand."

Printer Friendly | Permalink |  | Top
 
boston bean Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-07-10 05:47 AM
Response to Original message
25. Make up the most unbelievable explanation and it will be believed because
no one would ever believe they could get away with such an unbelievalbe explanation.
Printer Friendly | Permalink |  | Top
 
bananas Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-07-10 05:54 AM
Response to Original message
26. The Fickle Finger of Fat
http://www.tvacres.com/awards_booby_flying.htm



Flying Fickle Finger of Fate Award - Called the Rigid Digit, the Winged Weenie, Wonderful Wiggler, Friendly Phlange, and the Nifty Knuckle, this weekly satirical award was presented by comedians Dan Rowan and Dick Martin on the weekly comedy variety series ROWAN & MARTIN'S LAUGH-IN/NBC/1968-73 for the dumbest/craziest news item of the week. Gold/Silver in color, the award was a "hand" mounted on a trophy base. Its index finger adorned with two small wings rotated in a "Whoopee!" circular motion.

Recipients of this "uncoveted" award included then Los Angeles Chief of Police, Ed Davis who suggested that "gallows" be put in all airports for the hijackers so they could be hung on the spot; the City of Cleveland for their Cuyahoga River (It caught fire due to its high pollution levels); and a Wonderful Wiggler went to William F. Buckley for his philosophy "Never clarify tomorrow, what you can obscure today." Top awards went to the Pentagon. They won five times.


http://en.wikipedia.org/wiki/The_Fickle_Finger_of_Fate



The Fickle Finger of Fate (also known as El Dedo del destino and The Cup of St. Sebastian) is a 1967 comedy film directed by Richard Rush, produced by Sidney W. Pink, and starring Tab Hunter. Hunter stars as a clumsy businessman who accidentally gets wrapped up in a plot of intrigue while on a trip to Spain.

The film was distributed in America by Troma Entertainment.

Tagline: It's James Bond on acid!

Printer Friendly | Permalink |  | Top
 
City Lights Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-07-10 06:04 AM
Response to Original message
27. Was the trader typing with his big toe?
If not, I don't see how anyone can claim "fat finger" error. Typo, yes. Fat toe error, yes. Fat finger error, no.
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Fri Jul 25th 2014, 11:03 AM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC